Wednesday, September 02, 2015

Connecticut At The Crossroads

The following address
was given to the Wallingford Rotaryat IL Monticello Restaurant in Meriden on
Sept 2.

I want to thank Mark
Davis for inviting me to speak to you today. As you know, he’s been involved in
the Wallingford Rotary for years. After you’ve put in productive years
with Rotary, you acquire bragging rights, and this Rotary has much to boast of.
Mark doesn’t hold back. He and others regard Rotary as the best volunteer
social organization in the country and he’s proud to associate with this Rotary in particular, which started in 1923
and has given nearly a million dollars in grants to nonprofits. You are to be congratulated
on your energy, business intelligence and community concern.

This is a first for
me – the first time I have served as a stand-in for a Rear Admiral; such things
happen to a man only once or twice in a life time, and I plan to take full
advantage of it.

I should introduce
myself: I’m Don Pesci – no relation to Joe – and I’ve been a Connecticut columnist
for about 35 years. Several years ago, I began a blog called “Connecticut
Commentary: Red Notes From A Blue State,” a mouthful I know. I intended it as a
repository for columns printed and not printed; so, virtually all the columns
that have appeared in various papers in Connecticut and elsewhere may be found
there. If you haven’t visited Connecticut Commentary, you have all these years
been denying yourselves a joyful if somewhat sinful pleasure.

Today, I want to
talk about Connecticut’s journey through our economic and social briar patch.
I’m sure everyone here has felt the rip of thorns during the past few decades.
I’ll try to be informative AND entertaining; so if you find something
laugh-provoking, let’er rip. There’s nothing more painful than a belly-full of
suppressed laughter.

People in this room
may have noticed that it’s becoming increasingly difficult to show empathy for
Governor Dannel Malloy, even on those rare occasions when he may deserve it.

Some politicians in
state government are very good at slathering empathy over everything their
tongues touch, and Mr. Malloy is one of these.

Let me cite just one
example among many. When a disturbed gunman in Sandy Hook opened fire with an
AR 15 on school children and their wards some years back, Mr. Malloy empathized
– as indeed he should have. He made common cause with Republicans in the
General Assembly, and together they passed the most stringent gun laws in the
nation. These measures, it is rarely noted, did not reduce at all the
criminal use of guns in our major cities; Hartford, Connecticut’s Capital city,
last month showed up on one of those “worst in the nation” surveys as the most
violent city in New England; Bridgeport and New Haven were also in the running.

Republicans in the
General Assembly who, upon Mr. Malloy’s ascension to the governorship, found
themselves effectively marginalized, leapt at the chance to participate
meaningfully in shaping Connecticut’s gun-law future. It was like
old times, when the presence of a Republican governor, a Rowland or a Rell,
fairly assured a modicum of bipartisanship. This joy was short-lived, and soon
Mr. Malloy began to move in his old rut. If your ambition is to establish a one
party state, you cannot allow bipartisan participation in budgets.

When Mr. Malloy was
concocting his first budget, I noted that his chief ambition during his term in
office would be to marginalize the Republican Party. Unsurprisingly, this is
also the chief ambition of the most progressive President in modern times, Barack
Obama, who recently has concluded a friendship “deal” – none dare call it a
treaty -- with Iran, which is on a par with inviting Hannibal Lecter to lunch.

Parties atrophy when
they do not participate in the life of the state. When Mr. Malloy was putting
together his first biennial budget, he shooed Republicans from the room; ditto
his second budget; ditto all the revisions worked out between Mr. Malloy and
SEBAC, the union conglomerate authorized to represent union interests in
contract negotiations. A budget is the single most important piece of
legislation passed in the General Assembly each fiscal year, because it
determines the economic fate of the state. Republicans were pointedly excluded
from leaving ANY fingerprints on ANY of Mr. Malloy’s budgets or budget
revisions.

Thrown out of budget
negotiations, Republicans have now begun vigorously to push back: They no
longer empathize with Mr. Malloy’s economic and social policy prescriptions.
Put it this way: They have seen the progressive future, and they know it
doesn’t work. They are not alone.

This year, after
having submitted to the Democrat controlled General Assembly a budget that was
about a billion dollars out of balance, Mr. Malloy announced that budgets were,
after all, corporate constructions; the legislature would do what legislatures
generally do to gubernatorial budgets. And the legislature DID indeed finesse
the budget. It raised taxes on corporations.

Now, just in case
there is anyone in this room who supposes that Mr. Malloy and his
co-conspirators in the General Assembly – Speaker of the House Brendan Sharkey
and President Pro Tem of the Senate Martin Looney – would ever, ever,
ever seriously entertain the possibility of balancing budgets by
making rational long term cuts in spending, I should offer a
trigger warning: Hell will freeze over first. Mr. Malloy and majority Democrats
are authors of both the largest tax increase in Connecticut history, levied
when Mr. Malloy first attained office, and the second largest tax increase in
state history, the most recent imposition. Did anyone think, pre-Malloy, that
no one could possibly have trumped Lowell Weicker, the father of Connecticut’s
income tax, in revenue production? Welcome to Connecticut’s Progressive New
World Order.

Any show of surprise
was then and now, to my way of thing, surprising. If you have only one key on
your political harpsicord – increase taxes – you cannot be expected to play
Bach.

Mr. Malloy’s
partisan associates in the General Assembly raised taxes, a traditional false
solution to budget woes that puts Connecticut’s feet on a path of certain
dissolution. The problem in Connecticut is reckless spending; and we
know that problem can only be exacerbated by tax increases.
Belatedly, Connecticut’s industrial leaders – frequent and generous
contributors over the years to Democratic campaigns in the state – have begun
publicly to run red flags up their flagpoles. Fairfield’s General Electric
(GE), among others, has pushed back. It is, as you know, very unusual for
companies publicly to mount the political stage and up-stage,
so to speak, politicians who more or less own the political theater. This
public push-back came as a shock to any number of politicians who in the past
had been used to entertaining behind-the-curtain objections from businessmen
whose critical remarks they later could safely ignore.

Just before Mr.
Malloy’s recent out-of-balance budget was finalized, Republicans and business
leaders across the state held a desperate public hearing on the budget, the
legislative equivalent of Custer’s Last Stand. It was well attended by many
members of the Connecticut Business and Industries Association (CBIA) – but not
the governor, who was preparing to put a new feather in his cap: Head of the
Democratic Governors Association.

The
Malloy/Sharkey/Looney budget was passed in the feverish last moments of the
legislative session – GET THIS -- as an emergency certification bill, which meant that no alteration and no
debate on the final product, in what some are pleased to think is the
most democratic and rational body in the state, would be
permitted.

The chief villain of
the Malloy/Sharkey/Looney budget, CEO of GE Jeff Immelt thought, was the
unitary tax. This is a tax on business enterprise outside the state. If you
have exhausted tax possibilities in the state – and Connecticut’s tax prone
legislators long since have done this -- your best recourse is to tax someone
outside the state. Not for nothing did Maggie Thatcher warn that in a
quasi-socialist state the governing authority soon will run out of other
people’s money.

The unitary tax was
a bridge too far for Mr. Immelt, and he announced that GE was considering
pulling up roots in Connecticut. Almost immediately, Governors from other
states, among them Mario Cuomo of New York, began biting at the worm. Mr.
Cuomo, unlike his counterpart in New Jersey, Chris Christie, Mr. Malloy’s
politically too convenient bete-noir, is a Democrat, and so Mr.
Malloy’s criticism of New York’s Democratic poacher was muted. But just wait
until the two meet in the cloakroom at the next Democratic Governors
Association slug-fest. Self-dubbed “the porcupine,” Mr. Malloy is known for
throwing quills at people who cross him. Most recently, Mayor of Harford Pedro
Segarra caught one in his dear little heart. Mr. Segarra is defending his
mayoralty against Mr. Malloy’s former chief council, the estimable Luke Bronin,
whose real world executive experience could not fill a thimble. This is not to
say that a Bronin/Malloy administration would not be an improvement over a
Segarra administration.

Of course, we now
know that political experience in office is no longer necessary in the
postmodern world. And sometimes experience is a detriment, says no less an
authority than Donald Trump and, for that matter, a pre-Presidential Barack
Obama. We may now add Mr. Bronin to the list. If you want hope and change in
the post-modern political universe, it’s best to rely upon politicians used to
wandering in strange paths. The tried and true old road leads to the tried and
true brightly shining city on a hill – but who any more wants to go there? It's
much more useful politically for demagogues to tar opponents as benighted males
conducting a mythical war on women; or, better still, medieval terrorists – one
of the newest arrows in Hillary Clinton’s campaign quiver.

As soon as business
leaders stepped forward on the public stage to issue rational warnings,
progressive politicians in Connecticut took umbrage. It was a rare joy to hear
them blubbering and stammering. Speaker Sharkey said that GE complaints on
over-taxation and oppressive regulation rang hollow because GE paid no taxes.
GE Capital paid little in taxes because GE Capital, caught in the maelstrom of
a ruinous , needlessly protracted recession, made piddling profits the last few
years. The progressives want to be able to drain the udders of businessmen of
the mother’s milk of politics – taxes and political contributions – without
having to put up with the cows’ plaintive mooing.

The resistance of
the business community in Connecticut – the loud, public murmurings of
discontent, even at this late hour – may be a hopeful sign marking the end of a
long collaboration between progressive politics and some – I
must stress some – businessmen who hope by hook or crook to
wheedle progressives in power to their corner of the barracks so they might
gain an advantage over their competitors. This is crony capitalism in all its
glory. I’ve been raising a howl against it for ages.

"I desire,
perversely, to sing a song of praise to failure; as well as, of course, to success; and
to urge that we reappraise the dialectical voltage generated by these two
polarities… Public policy must tolerate, indeed anticipate, economic
failure (italics original).”

This golden
perception is the obverse of crony capitalism. Crony capitalism -- which would
not be possible in the absence of crony politicians – is a perversion of market
capitalism.

The enemies of sound
business practice in our day are: crony capitalism, progressivism – a doctrine
that recognizes no limits to governmental authority, not even constitutional
restraints or the more mundane restraints imposed on us by a frank recognition
of reality – the one party state, runaway spending, and what I have elsewhere
called salvational politics, the ruinous notion that all problems may be solved
by heroic politicians such as, to bring this talk back to its beginning, Mr.
Malloy, Mr. Obama and Mr. Trump.

We in Connecticut
have arrived at a tipping point: Given our present circumstances, to do nothing
is to do something. We no longer have the luxury of passive resistance. There
is more intellectual firepower in this room alone than may be found in most
other associations. I would gratify me to think it’s possible that here an
effective resistance to the tyranny of inertia may be mounted, and that with
courage and persistence we may find a way back to normalcy, justice, sanity and
reality.

Once again, thank
you for inviting me. If there are any questions, I’ll try my best to answer
them.